ETFs

[OldShooter]

right you are ...........VTWAX is pretty much every stock there is. That is one version of being diverse for sure.

As you study this stuff you will learn that the true experts, like Nobel winner Eugene Fama, say that we should hold "the market portfolio," which is everything. With this portfolio we get the overall movement of the market (historically upwards 5-8%) without worrying about the chaos (aka randomness) of stocks and stock-picking.

95% is a lot.

No point in holding anything else. Anything we could buy (except for clones of VTWAX) would reduce our diversification. (To clarify, VTWAX is 95% of our equity tranche. Last time I looked AA was about 70/30)

Let me guess........you are retired but don't need to draw on your nest egg for retirement income

Wrong guess.

 

[Rjhasti]

Now we are getting someplace to learn from.

Sounds like a good plan............certainly simple. Lots of single and doubles with an occasional triple or homer. I like it.
........it is sort of like a Dave Ramsey plan i.e. stay fully invested in the stock market even in retirement.

But what is your situation......i.e. age, retired, pension? no pension? are you on SS yet?, is your VTWAX in qualified or non-Q? some in both etc.

I am rather well versed and always learn from others.

 

[target2019]

yes portfolio visualizer is good and I have used that all the time until I found fundvisualizer.com
It is so much quicker and easier to use and the graphics so much better and is also free.

both serve the same purpose.

So what ETF's to you have and why?

Share with us.

I updated the link for all, adding VTWAX. THe ETF for that fund is VT.

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=2By49FXh07i4JwxcKPllqt

What do you see in the analysis over several tabs of backtest?

 

[Rjhasti]

yes I do.........well done........

I get where you are coming from.......yours is nice and simple....... for sure.

if one was looking at this purely on a past performance perspective the results are obvious

given that past......I suspect the future is bright for the 5 funds I chose. Tech heavy yes but all have a still different slant on them.

Essenstial we both have our points.

So what is your perspective?

 

[OldShooter]

There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest of them have to pee on the electric fence for themselves.

--- Will Rogers

 

[target2019]

He who would learn to fly one day must first learn to stand and walk and run and climb and dance; one cannot fly into flying.

Friedrich Nietzsche

 

[richardf]

CDs

I am new to this site and just retired a few months ago. I have done a lot of research on ETFs and the are the ones I found to be the best:
XLK
SCHG
VGT
SCHD.....for dividend only
FSELX......a semi conductor mutual fund because I can't find any ETF semi conductor fund as good as this.

What are your thoughts?

I would go with CDs and stay away from WallStreet especially if you are over 65. A bird in the hand sort of thing.

 

[Rjhasti]

yes you should have in cash type products
then 50%+/- in CD like products (we use to call this bonds}
and another 50%+/- in equities
Every one has their own percentages for their own reasons

No the lines have been changes a little because CD's pay what bonds use to
and Cash such as money markets pay nearly the same as CD's

That has been a bit confusing because the categories lines have been blurred.

The Funds I listed above represent about 35% of my portfolio
about 10% is in money market funds earning 5% and around 50% are in Fixed indexed annuities.


I was hoping someone out there wanted to discuss in depth these funds or theirs and to say why............but seems I got no takers

 

[Lvus101]

We have a combination of ETFs and very few single stocks. Sold most of those single stocks awhile back.
SCHD for long term growth although we may dump it.
SPY
QQQ
JEPQ and SPYI work the covered call side of the market paying monthly in our Rollover IRA.
SGOV short term Treasury ETF also pays monthly
We also purchase a lot of 30 day T Bill's
The rest of our pile that we trade out of daily sits in Fidelity SPAXX brokerage account.

 

[unclemick]

At age 80 (thirty years ER) my big dog is Vanguard Target Retirement Income having gone to Target series in 2006 ( 60/40 ish). Now more 30/70.

Now mad money has creeped up to 8-10% thanks to covid lockdown. VT - vanguard total world stock, Berkshire B, Costco and a long mish mash of small Motley Fool types.

Heh heh heh - Hopefully will spend the mad money before the end and not leave too much on the table.

 

[Rjhasti]

We have a combination of ETFs and very few single stocks. Sold most of those single stocks awhile back.
SCHD for long term growth although we may dump it.
SPY
QQQ
JEPQ and SPYI work the covered call side of the market paying monthly in our Rollover IRA.
SGOV short term Treasury ETF also pays monthly
We also purchase a lot of 30 day T Bill's
The rest of our pile that we trade out of daily sits in Fidelity SPAXX brokerage account.

Lvus,
Good picks by you for sure.
Hang in there with SCHD........they did some rebalancing and will soon be on top of a balance value stock fund that pays a decent dividend.
Glad you are on Fidelity........they have the best platform to trade on ..........love it.
great job

 

[Rjhasti]

At age 80 (thirty years ER) my big dog is Vanguard Target Retirement Income having gone to Target series in 2006 ( 60/40 ish). Now more 30/70.

Now mad money has creeped up to 8-10% thanks to covid lockdown. VT - vanguard total world stock, Berkshire B, Costco and a long mish mash of small Motley Fool types.

Heh heh heh - Hopefully will spend the mad money before the end and not leave too much on the table.

uncle mike,
At 80 continue what you are doing.......you are doing good.

 

[Scarfinger68]

I am new to this site and just retired a few months ago. I have done a lot of research on ETFs and the are the ones I found to be the best:
XLK
SCHG
VGT
SCHD.....for dividend only
FSELX......a semi conductor mutual fund because I can't find any ETF semi conductor fund as good as this.

What are your thoughts?

Paul Merriman puts out a list of best ETF’s. I believe it is based off of farma and French factors and expense ratios

 

[Scarfinger68]

ETF

I have these outside of my work 401k

At Fidelity:

FXAIX
VNQ
FSSNX
FLCOX
FISVX
AVDV
DFIV

 

[Rjhasti]

FXAIX is probably the best S&P 500 fund out there because of the super low expense ratio of .02...........plus since you have this money outside of your 401k means you are a customer of Fidelity which means you have access to the best tools on the Fidelity web site.......I also have access to those planning tools and they are great........I use them all the time.
Your other funds are Real Estate, Small Cap or International with the exception of FLCOX which is a value fund. They are all low cost so that is very good.
Without knowing your situation such as age and other funds in your 401k and the percentages in all your funds .......I can only guess that you must like risk if you are in these funds.

 

[Scarfinger68]

I am basically 70% equities and 30% bonds. My equities are 70% US and 30% international.

I use Fidelity to add value and risk to my overall portfolio.

10 years until my estimated retirement. Currently 55 years old.

 

[Rjhasti]

yes you accept risk for sure and hopefully you will be rewarded for that.

What funds do you have in your 401k and how much a year are you putting putting into it

 

[OldShooter]

yes you accept risk for sure …

Very little risk in equities historically with a ten year investment horizon, assuming good diversification.

 

[Scarfinger68]

My Portfolio

yes you accept risk for sure and hopefully you will be rewarded for that.

What funds do you have in your 401k and how much a year are you putting putting into it

I am under the FERS system: 225,000 in work 401K and 12,000 at fidelity. Fidelity is only about 6% of my portfolio. I add $16,300 to work and only about 1200 a year to my Fidelity currently. 5% of my work funds are Roth. I plan on transferring my Roth portion at retirement to Fidelity for more diversity, value and risk. Work funds are as follows:

27% G fund: short-term U.S. Treasury securities. (Can't lose value, unless you count for inflation)

7% F fund: follows "Bloomberg U.S. Aggregate Bond Index"

34% C fund: follows "Standard and Poor's 500"

9% S fund: follows "Dow Jones U.S. Completion Total Stock Market Index"

23% I fund: follows: "MSCI EAFE (Europe, Australasia, Far East) Index"

It basically adds up to the L2035 "lifecycle" funds which is a target date fund


My plan is to be 60/40 or 50/50 at retirement. To keep my aggressive/value funds in the Roth.

I should have somewhere around 400K to 600K at retirement, plus SS at 2300$ and 1 pension at 800$ and a second pension at 1600$.

I like Paul Merrimans and Chris Pedersen research on ETF's. Google Paul Merriman best in class ETF's. They back their findings with research.

 

[Rjhasti]

You may want to compare a few of Paul's choices of ETF's on your favorite compare site.
This is the one I use but they are all the same.

https://www.fundvisualizer.com

Do some comparisons.........I would love to hear your perspectives one your do.
This is all for fun..........maybe we will both learn something. LOL
My quest is always to find the best fund in each category I am going to use......
hope to hear from you soon.

 

[MarieIG]

My newest "intentional" ETF was SCHD, which I started at early this year. I have for the most part been dollar cost averaging in, punctuated with some limit orders which allow for bigger nibbles on declines. I am flat for the year.

I watched a number of videos on this, read a portion of the prospectus (low cost) prior to buying. I figure it is lack luster due to a dearth of tech, and holdings of banks, oil and medical - but que sera sera. I find my funds behave a bit like wack-a-mole - with one popping up (tech) while others go down (divvies and value).

This is a bit of a value position for me. I intend to stick with the plan and hold it long term. If it goes back below $68, I'll consider buying a bit more on sale. I have already reached my goal for the year due to limit orders. I may have bought a little SCHY along the way to keep it company.

My "comparison" to SCHD would be to VYM (not to a tech heavy etf).

As far as SCHG - I think it's a good fund although not at an entry point for me at the moment. And yes, I know it can shoot up more, but I'm not much of a trader, but more of a long-term holder. (This would be something for me to "play with" if we get a pull back next year.)

I have the Vanguard Utility ETF which has been abysmal (probably due to the yields on treasuries). I sailed the Utilities in my traditional IRA over to Roth (converted in kind) when they dipped to about $125; bought more in the $120 - $121 range - and am now basically ignoring them. (Also a long-term hold.)

 

[Scarfinger68]

Well, it would be redundant. Paul has 2 researchers that have access to paid services and more resources than I am willing to pay for. They already do the comparison for different asset classes and make a list.

Also, I believe the "BEST" fund is somewhat subjective depending on the interpreter. If Low cost is your main concern then you would have a different list vs someone that wanted more value in their ETF's. So say your run of the mil Fidelity fund vs a Dimensional ETF or Advantis ETF.

I have done a bunch of back testing and comparing of fund classes and what I have learned over the last 10 years is

There are a lot smarter people than me
Best is something that you are comfortable with and will stay invested in
No one knows what the stock market will do
Larry Swedroe: "don't listen to economic forecast" (and that is what he did for a living)
A well diversified portfolio is you best option

I am comfortable with the funds that I am in. So for me, my funds are the best funds. The only thing I go back and forth on is stock to bond ratio at retirement.

Best of luck finding your best funds

 

[OldShooter]

... I figure it is lack luster due to a dearth of tech, and holdings of banks, oil and medical - but que sera sera. ...

Yes, that's the tradeoff for funds that chase dividends. Its just the nature of dividend stocks to be more lackluster. Dividend screening also screens out companies that do stock buy-backs instead of paying cash dividends.

... I find my funds behave a bit like wack-a-mole - with one popping up (tech) while others go down (divvies and value). ...

True for any of us that buy sector funds. The quilt chart illustrates: https://www.callan.com/research/2022-classic-periodic-table/# That's the strength of broad index funds; instead of looking for needles, they simply buy the whole haystack.

 

[MarieIG]

Yes, that's the tradeoff for funds that chase dividends. Its just the nature of dividend stocks to be more lackluster. Dividend screening also screens out companies that do stock buy-backs instead of paying cash dividends.

True for any of us that buy sector funds. The quilt chart illustrates: https://www.callan.com/research/2022-classic-periodic-table/# That's the strength of broad index funds; instead of looking for needles, they simply buy the whole haystack.

Yes, that's the majority of funds, VTSAX/ VTIAX (in IRAS) and the corresponding ETFs in taxable. (They will probably sit there and reinvest - other than being converted, until I shuffle off this mortal coil.)

 

[Rjhasti]

I think most people would consider the word "best" to mean "performance over a reasonable time compared to other funds of the same category"
Pretty sure that would be a universal definition.

As Dave Ramsey says focusing on just the expense part of a fund matters less if that fund has the best performance year in and year out. That seems pretty good advice to me. Of course you always look for the lowest cost with the best performance.

Best of luck to you .